Welcome back, everyone.
We had a great session yesterday as we captured the majority of the move. The session opened above the long level, which sparked a 22-handle rally right up to the long target. As soon as we reached this level, there was a complete collapse of prices once the short level was taken out. We then saw a 56-handle drop which fell short of the short target but was a great move nonetheless.
Let this be another prime example of the power of Volume Profile. The long level produced an instant spike at the open, and then dropping below the short level produced an instant slide down to the low of the day. This leaves us in an interesting spot for tomorrow’s session, as we are in the middle ground between the POC and VAL.
We also posted some stocks yesterday that have seen moves in our favor. For instance, we called a short on META, which closed the day down almost -3%. There is still plenty of room to head lower and reach our target. Amazon was another stock we called for selling, and it is close to breaking back below 200. The stock got hit hard today with a close of -2.30%. Four other stock setups were posted, but I will leave those exclusive to subscribers.
Now, to shift our focus to today’s session: As noted in the Flow State #103 post, we pointed out the State of the Union address which will take place late tonight. Since this is after the close, we can expect the session to see little volatility and likely balance for most of the day. Larger moves may come during and after the speech from the President.
For my approach, if price remains below the 6889 POC, I will lean toward being bearish for a break below the 6801 VAL. If we rally above this level, we could see a strong squeeze back toward 7,000. This is because the majority of positioning is at this level; both longs and shorts have interacted here the most, and we call this “fair price.” When you get a strong catalyst like the speech, we can see a shift from current value into new value. Price tells you what is likely to happen based on the POC and the overall trend. With that said, we will lean on the 6889 POC as a reference point to know if buyers or sellers are in control. I will speak more on this in the S&P levels section.
